The European Union’s push to replace Russian oil and natural gas is causing a tanker shortage and may lead to Asian nations freezing this winter, Bloomberg reported on Monday.
Liquefied natural gas, diesel and crude are now being transported to the bloc from further away than usual, after the continent announced restrictions on energy imports from Russia.
That leads to vessels being occupied for longer, causes tanker shortages and drives freight rates higher, Bloomberg reported, citing shipping experts.
The shortages threaten to impact Asian economies that rely on oil and LNG imports from the US, Bloomberg notes.
The cost of shipping a cargo of oil from the US to China is at the highest level since 2020, with overall freight rates threatening to surpass last year’s winter peak, the outlet writes, adding that Asia may also struggle to get spare cargoes at short notice if the weather turns extremely cold.
Traders are also reportedly putting more fuel in floating storage, contributing to a tight shipping market.
The situation with tanker availability may be aggravated further when the Freeport facility in Texas, a major global LNG exporting hub, resumes operations in November after a fire took it offline earlier this year.